The Bank of Mexico (Banxico) cut interest rates to 6.25 %, effective Friday, November 6, in a 3-2 vote by the Governing Board.
Analysts indicate that the measure could remain in place for an extended period, coupled with the resumption of downward adjustments in the cost of credit, “despite the monetary authority’s upward revision of its year-end inflation expectations.”
The majority bloc of the Governing Board emphasized that the overall disinflationary process continues and that “the level of monetary tightening implemented continues to operate effectively on the economy.”
Authorities also noted that the slack in productive activity reduces domestic demand pressures, “which significantly limits the pass-through of the peso’s depreciation to consumer prices.”
Regarding inflation, the board indicated that between the first half of September and the first half of October 2026, annual headline inflation rose from 3.42 % to 3.62 %, due to higher energy prices and products included in the non-core index. Meanwhile, core inflation decreased marginally from 3.79 % to 3.78 % during the same period.
Despite adjustments to Banxico’s forecasts for the fourth quarter of 2026, “the central bank reaffirmed its expectation that headline inflation will converge to the 3.0 % target by the fourth quarter of 2027.”
M.Pino
Source: excelsior
(Reference image source: Luis Andrés Villalón Vega on Unsplash)
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